Success and influencing factors
The stability and efficiency of EVN‘s energy distribution networks are central factors for ensuring supply security – the key strategic area of activity for EVN in relation to its stakeholders – and for protecting the Group’s sustainable economic success. The continuous improvement of these networks therefore represents one of the focal points of EVN’s strategic investments. In South Eastern Europe, the modernisation of the networks and the implementation of measures to prevent electricity theft are sustainably reducing network losses. The development of earnings in the network business is significantly dependent on the regulatory environment and the tariff system.
In the area of energy generation, EVN ensures supply security by generating a balanced share of its energy requirements with its own facilities and by maintaining a flexible mix of generation from thermal and renewable capacities. The high importance given to two strategic areas of activity in the EVN materiality matrix – “sustainable energy generation and climate protection“ and “environmental protection and resource conservation“ – is reflected in the importance placed on the expansion of energy generation from renewable sources and the continuous improvement of generation and distribution efficiency. The earnings from thermal energy generation are dependent on the development of primary energy prices and selling prices on the European electricity market. Earnings from the gener ation and sale of renewable energy are dependent on regulated feed-in tariffs, and on water flow and wind conditions. The on-going analysis of these relevant factors allows EVN to actively utilise the optimisation potential of its own generation activities.
In the area of electricity and natural gas trading, EVN uses various hedging strategies to counter the volatility on the markets for primary energy, electricity procurement and electricity sales. The company‘s integrated business model – above all the flexible use of own generation capacities – creates a natural hedge for the electricity business. Earnings from the generation of heat from biomass are dependent on the cost of the purchased biogenic fuels. Selling prices are indexed by linking the related contracts to official indexes. The sales volumes of electricity, natural gas and heat are influenced by the temperature, whereby the highest sales volumes are recorded during the winter months.
In the area of environmental services, the security of fresh water supplies for drinking water is of key importance. The focus here is on the connection of wells and well fields as well as quality improvements through the construction of natural filter plants based on state-of-the-art technology and environmental standards in order to ensure a sustainable, high quality and long-term supply at fair prices. The demand for solutions in the international project business is influenced by the financing capabilities of the public sector customers. A broad international focus and the successful completion of over 100 projects have given EVN a reputation as a recognised expert for the competent realisation of projects for municipal waste water disposal, drinking water purification and thermal waste utilisation in Central, South Eastern and Eastern Europe. EVN serves as the general contractor for these projects and is therefore responsible for planning and turnkey construction as well as subsequent operation where desired. Through so-called PPP models (Public Private Partnership), EVN also arranges the financing without taking on any economic risks for the respective facility.
The strategic investments make an important and valuable contribution to EVN‘s vertical integration as well as to the supply security for electricity and natural gas. This is true, above all, for the investments in Verbund AG and the Inn River power plants that support electricity generation. Natural gas storage in Austria has also become an important issue, in particular due to the current international crises and the related direct threats to natural gas supplies. With the investment in Rohöl-Aufsuchungs AG (RAG) EVN holds gas storage facilities in Austria in its portfolio.